Sunday, February 7, 2010

S.W.O.T. Analysis of Hal's Hardware E-commerce Site

Case Study #1 for E-Commerce Law

This document is a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of HHI’s, Hal’s Hardware, Inc., proposed electronic commerce website.

Strengths

The following are the strengths of the proposed electronic website:
 Ease of transaction
 Improve accessibility of products
 Widen area of coverage
 More visibility and advertisement

The proposed electronic commerce website may be very helpful in increasing the ease of transactions since, based on the narrative, the owner plans to add an online shopping feature to the website. Through this, customers no longer have to travel to buy items from HHI. This is in corollary to another strength, which is the improvement of accessibility of products. A website is also found on the Internet, which is the network of networks. This characteristic of a website is very helpful in widening the area of coverage of HHI because a website can be viewed from anywhere in the world where there is access to the Internet. Finally, more visibililty and advertisement means that HHI can be viewed by more people, even non-regular customers, and can gain more advertisement, especially from sites like Google that have advertising programs.

Weaknesses

The following are the weaknesses of the proposed electronic website:
 Cost of installation and configuration
 Additional maintenance cost
 Additional personnel cost to maintain the website or keep the site updated

Coupled with the strengths of an electronic commerce sites are weaknesses. For the most part, these weaknesses revolve around the cost of running a website, specifically its Total Cost of Ownership (TCO). Running a website is no easy task and may require additional money and skills to run successfully. In the case of HHI, since there is already an existing website and it just needs some additional features, the development cost might be lesser than putting up a site from scratch. However, the skill needed for development may come costly, unless the owner plans to develop the site himself. Maintaining the site and keeping the site updated may also require personnel dedicated to doing just this and keep the site updated as the orders come. Surely, the owner cannot dedicate himself to this work alone and would need to hire personnel.

Opportunities

The following are the opportunities of the proposed electronic website:
 Partnership with other websites for more advertisement
 Expansion of services or features offered
 Increase in the number of customers because of wider reach

HHI can gain various opportunities from running a website. First is the partnership it can gain from other websites. As what its competitors (Outlet Tool Supply, Tool Crib, etc.) have done – formed alliance with Amazon.com – HHI can also form alliances with sites of the same interests. This can give HHI opportunities for partnership with companies that sell related products and even its suppliers. Having a website may also expand services or features offered. For example, HHI can put up an online bulletin where customers can post their ads for tools that they want to buy or sell, job notices, announcements about seminars, and others. Speaking of seminars, HHI can also offer online training courses or tutorials for the customers. Because of these, HHI will have the opportunity to increase the number of customers because of its wider reach.

Threats

The following are the threats of the proposed electronic website:
 Lessen interaction with customers and affect customer relationship
 Online threats such as hackers
 Competition from other companies

As mentioned in the narrative, HHI focuses much of its personnel effort on improving customer experience when they visit the stores because this is something that larger competitors are unwilling or unable to do. However, if an online shopping feature is added to the website, this poses a threat to their customer relationship because customers will no longer have to visit the store to purchase even smaller items, thus there will no longer be personal interaction with the customers. Websites are also susceptible to online threats such as hackers, who have ill motives for attacking a website. Security is a very sensitive issue for online shopping and providing a modest level of security can add to customer satisfaction. In the Internet cloud, competition is even fiercer because the Internet is boundless and very large. HHI has to come up with marketing strategies that will help it make its place in the online hardware industry.

Recommendations

Based on the SWOT Analysis conducted above, I came up with the following recommendations:

 Partnership with advertising/marketing websites should be established to promote the site and increase visibility.
 There should be exceptions as to what products can be ordered online. For example, online shopping may be limited only to smaller items so that customers will still have a reason to visit the store when buying larger items.
 Website should include a help section, tutorial section, videos section, etc. where customers can browse for any power tool demonstration, help in tool operation, or training courses.
 Customers should be encouraged to create accounts on the website to access more features. This is also to reduce the risk of attackers abusing the website.
 The site should include an online consultation feature where customers can seek for help regarding the products sold at HHI.
 Security should also be a main focus because increasing the site’s security can add to the customers’ online experience.
 An online bulletin can be put up where HHI, customers, suppliers can post announcements, ads or notices about tools or services they offer.
 Users should be allowed to subscribe to this bulletin so that they can receive email updates whenever news is posted.
 So as not to lose the relationship with customers, HHI should still encourage the customers to visit the stores occasionally or arrange gatherings where customers can consult with the personnel for matters that cannot be discussed online.
 Careful consideration should be made in terms of the development of the website. Requirements should be made clear early on to prevent repetitive development because this can be very costly.
 The number of personnel in charge of maintaining the website should be carefully considered, as well, because assigning personnel to the website will require some training.
 A good way to come up with good marketing/advertising strategies is to brainstorm with the personnel and staff about ways to market the site. This also stimulates personnel involvement and cooperation.

7 comments:

  1. Looks good. What was your grade for it?

    ReplyDelete
  2. its just wat i needd.

    ReplyDelete
  3. this is what i really needed..

    ReplyDelete
  4. read first the prob. so that you will know what the swot analysis and it's recommendation all about...!

    ReplyDelete
  5. this is what i need for my case study. thanks for this

    ReplyDelete
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